by Sanjeev Kumar Gopalakrishnan, Investing
05 Nov , 2018

Changing Personal Financial Planning Focus from Your 20s to Your Post-Retirement Stage

Personal financial planning is a critical activity that’s your life-long companion. It’s not enough to just earn money. Saving and investing your hard-earned money so it grows and is beneficial to you in your post-retirement life is equally important. But to reach your life goals and to lead a fairly comfortable retired life you need to plan your finances and implement your plans smartly. One of the most important points that you should remember is that your financial planning approach changes with every decade of your life, from when you start earning a living to your post-retirement age.  So here are four specific stages of your life in terms of personal financial planning:

1.       Initial years of earning

2.       Years of financial consolidation

3.       Years of extensive expenses

4.       Retirement and post-retirement

Initial years of earning

This stage does not necessarily mean getting a job or your 20s, but this stage commences the moment you start receiving an income. It could be a stipend, salary, returns from an investment in your name, or even a considerable amount of pocket money! At this stage personal financial planning could be the last task you focus on, except probably when your finance and accounting team representative mentions employee benefits or tax. The tendency to overspend and live financially in the present can take over your logical thinking. Equally strong is the danger of falling into the credit card and other traps that lead you into serious debt.

Personal Financial planning tip

1.       Start following the 50-20-30 rule in savings, needs, and wants proportion of your income

2.       Learn to create sensible budgets based on your income

3.       Create an emergency fund

4.       Get an early bird start on your health-focused plans

5.       Focus on finalizing at least two life goals – it could be a short-term goal of travelling abroad or a long-term goal of building a home. Such goals will help you work on your earnings and spends ratio smartly

6.       Most of us don’t think about retirement at this stage, but if you do then you will save on a lot of money when you get started this young

7.       Insurance plans might come as an attractive option not just as a savings option but also to save taxes, especially if you are having dependants

8.       Do not shy away from PF and other financial employee benefits that your office offers

9.       Clear off all debts as a priority


Years of financial consolidation

This stage in your life can be quite competitive and stressful as you will move on to new relationships, and you will have to continue your financial planning efforts as a team. The initial freedom to spend reduces during this stage of life and the number of financial goals increases to include the new members in your family – your spouse, your children, and so on. Your concern for your family and loved ones’ health also starts taking shape during this phase.

Personal Financial planning tip

1.       Stringently stick to the 50-30-20 plan – you should be quite a pro at this by now

2.       Plan your loans carefully and do not overburden your income with unmanageable debts

3.       Expand your emergency fund and health plans

4.        Insurance plans become critical at this stage

5.       Plan on investments that will give you returns at critical milestones of your life – e.g., children’s education, a family member’s marriage, your home

6.       Create a healthy balance of short- and long-terms investments that match your goals, as well as deliver on the need for both immediate necessities and distant goals

7.       Dedicate a significant percentage of your increasing income to your retirement corpus

8.       Do ensure that your financial income increases steadily by expanding your skill sets and growing up the business or professional ladder

9.       Revisit your financial planning regularly to assess the need for revision

Years of extensive expenses

This stage of life sees your fairly confident if your first two financial stages have passed as per plan. You will be having quite a comfortable income; however, this is also a stage where many of us take a step back and explore new opportunities such as a new line of work or starting your own venture. Hence, this stage could well mark new beginnings for many of us. Unforeseen expenses in terms of ill-health, sudden loans, children’s education, etc. can come as unexpected shocks. Hence creating a balance between your income and expenses and focusing on the right goals becomes critical.

 Personal Financial planning tip

1.       This is a period of focusing on managing well-established investments

2.        Many of your goals are nearing completion now – home, education, retirement, etc. – hence be wary of unnecessary expenditure

3.       Do not neglect your emergency fund and health plans

4.       Retirement plans become your core focus in this stage

5.       Preferably make new short-term investments or go in for annuity prodcuts

6.       Revisit your financial planning regularly to assess the need for revision

7.       Rebuild on your skill sets, that could come in handy even in your retired life

Retirement and post-retirement

This is stage where you can actually start enjoy the fruits of your brilliant financial planning. But you cannot always retain the same standard of lives. Hence be ready to make cuts and get back to budgeting. Keep health plans and insurance, as well as your emergency funds, as your top priority. Completely stay away from debts. If you are able to, do take up simple and easy means of earning a living. Simplify your finance portfolio for easy tracking. Share all details with your nominee.


Such an organized stage-wise financial planning will definitely deliver on the promise of a financially peaceful life. But we know that you will need help in making the right investment decisions.  That’s why you require the support of a robust financial advisory service and investment advisors. PrognoAdvisor is your trusted online financial planning service from India, with extensive expertise in understanding your specific financial and life goals and guiding you achieve these goals with confidence. Connect with our financial advisors at to understand how you can simplify the entire process of personal financial planning.



 About The Author

Sanjeev Kumar G, an IBS Chennai Alumni, is a Certified Financial Planner (CFP) from India, since 2005. He has 22 years of experience and is an expert in various personal finance areas like portfolio construction, investment research, life insurance and financial planning.


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